Suppose you borrow $16000M when financing a gym which cost is at $250,000M. You expect to generate a cash flow of $8000M at the end of the year if demand is weak, $55000M if demand is as expected and $648000M if demand is strong. The current risk-free interest rate is 6% (risk of debt) and there's a 10% risk premium for the risk of the assets

a. What is the expected return of equity?

b. What would be the return of equity if the demand is strong?

c. What would be the return of equity if the demand is weak?